UK Online Advertising Enjoys Dramatic Growth
Online advertising expenditure has increased by 52% to £507 million, accounting for 3.4% of total adspend in 2004, according to new data released by Starcom UK Group.
The dramatic growth is fuelled by the uptake of broadband, with Starcom revealing that one in four people go online everyday and 49% of all internet use is via broadband.
Although the Group says broadband is beginning to plateau, total internet penetration is still increasing by 10% per annum, with almost all of internet growth stemming from broadband. Heavy promotion and advertising campaigns by service providers have resulted in broadband enjoying a 81% increase year on year.
Display advertising, such as skyscrapers and banners, remain the most popular form of online advertising, with a 46% share.
Paid for search is revealed to be the UK’s fastest growing media channel, with a year on year increase of 109%, to £114.3 million for the first half of 2004. The medium now accounts for 32% of all online advertisers spend.
The past six months has seen 16 million people buy online, with internet purchases accounting for around 10% of all online sales. This confirms recent research by global research agency, Millward Brown, that the UK is leading Europe in terms of its internet shopping habits, with over a quarter of UK consumers spending more than £1000 online during 2004, compared to a European average of just 15%.
Starcom argues that the rapid rise in money spend in the search sector has been instrumental in catapulting the internet’s share of all media spend past 3%. Paid for search leads the way when it comes to direct response advertising online, although brand advertisers also have much to benefit from.
Online is predicted to lead the way in terms of advertising expenditure in 2005, with US research firms revealing that total media adspend equals $264.2 billion in 2004, with online advertising comprising $9.5 million, or 3.6% of that total.
Starcom Motive: 020 7453 4444: www.starcommotive.com
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